Pipeline Foods acquires ancient grains unit

Ascendant Partners’ Mark Warren says growing consumer demand and product innovation helped bring strategic and financial investor interest in the Organic Ventures’ unit offering grains like quinoa, durum and spelt.

Pipeline Foods has acquired the ancient grains and specialty products business of Organic Ventures, a provider of wheat and flour products headquartered in Fountain City, Wisconsin. Financial terms were undisclosed.

Under the terms of the deal announced last week, Pipeline will originate all grain and ingredients for Organic Ventures’ existing line of products as well as those sold by its subsidiary, Great River Organic Milling.

Great River will continue to own Organic Ventures’ retail-marketed and wheat flower products. Organic Ventures’ president, Rick Halverson, has joined AMERRA Capital Management-backed Pipeline as its vice-president for organic ingredients and ancient grains and an equity shareholder.

“This is a critical next step in our company’s growth,” Pipeline founder and board chairman Eric Jackson said in a statement. “It will add new capabilities and products to the existing Pipeline Foods portfolio – a benefit to both our farmers and food company customers.”

According to its website, the ancient grains currently offered by Great River include teff, quinoa and einkorn, and 95 percent of its suppliers are in the US Midwest.

The Whole Grains Council defines “ancient grains” as those that have remained unchanged for several hundred years. The group of crops includes wheat-derivatives and heirloom varieties of other grains such as barley, wheat and rice. In some cases, the term is used to refer to crops largely ignored in the West, such as sorghum, amaranth and millet.

Kellee James, chief executive of organic and non-GMO market data provider Mercaris, told Agri Investor that although markets for ancient grains like kernza, emmer and einkorn are relatively small, their novelty often drives consumer demand.

James said the category has drawn some some interest from investors. She highlighted the purchase in 2018 of Nature’s Organic Grist, which included a unit devoted to ancient grains, by a subsidiary of Ceres Global Ag.

“We bred grains for commercial use,” James explained. “These are from before breeding advances were applied, so you get the ‘ancient’ grains: things that are a little heavier, maybe lower-yielding. There’s a [price] premium that comes because they are a pain in the neck to deal with!”

Mark Warren, a partner at Denver-headquartered food- and agri-focused investment banking and financial advisory firm Ascendant Partners – which ran the approximately nine-month sale process for Organic Ventures – told Agri Investor it had attracted significant interest from both strategic and financial buyers, notwithstanding the logistical challenges.

He said potential financial buyers were mostly food and agri-focused investors.

“A lot of people, particularly strategics, are looking to broaden their product mix,” he said. “You are seeing more incorporation of all the specialty ingredients and ancient grains that historically weren’t a priority for a lot of larger [consumer product goods companies]. They had their base of products that worked well for them. Now you are seeing more innovation.”

Warren said Halverson’s interest in finding a buyer for only the wholesale portion of Organic Ventures’ specialty ingredients and ancient grains unit fit well with Pipeline’s wish to avoid introducing a consumer product that would compete with customers of its supply chain services.

Pipeline declined to comment.